With its long-standing partnership with McLaren set to end shortly, Mercedes is in talks to become the Formula One engine supplier for Williams from next year onward.
Mercedes is contracted to supply Force India and McLaren next year, but the British F1 team starts its partnership with Japanese manufacturer Honda in 2015.
"It's clear that we are losing an engine customer in 2015 and for Mercedes it is important to have a regular business case," Mercedes executive director Toto Wolff said after Saturday's qualifying session at the Monaco Grand Prix. "That is why we are having certain discussions with teams and Williams is one of them."
Former manufacturers' champion Williams, which is currently supplied by Renault, has had a miserable season so far. The team has failed to score a point after five races heading into Sunday's Monaco Grand Prix.
Wolff is also a shareholder in Williams.
F1 faces a big challenge next year when cars switch from 2.4-litre V8 engines to turbo-charged 1.6-litre V6s.